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November 10, 2010

Gold Trading: What To Do?

Well, I'm wondering whether this is a significant correction for Gold (and Silver).

The above is the current chart updated to the time of writing.

The following charts of the three fairly recent situations that seem similar to todays. By fairly similar I mean:

Had been RSI overbought for a while.

Had a correction that took the RSI down to 50 but not much further.

Had a recovery after a small number of weeks that brought the RSI back to 70.

The PINK lines are the first case of a significant down day following that recovery of the RSI back to 70.

None of them seasonally match our present predicament occuring in January or February. All of them had a bounce on the day following the equivalent of yesterday (which we aren't having today). So, they don't seem to directly relate to our current circumstance.

All of them moved back on to renewed strength and highs. That's attractive.

Based on this circumstance, I guess I'm going to hold at least another day. I'll probably hold provided we don't get a 4PM close below yesterday's low.

What do you think of the next week or so for gold and silver?

MontyHigh, www.worldofwallstreet.us

P.S., The silver charts are similarly quite different from current circumstances, similarly went on to very nice further gains without violating the equivalent of yesterday's lows. I reiterate that I'll probably hold provided we don't get a 4PM close below yesterday's lows.